Economists doubt govt’s capacity to implement projects promised in budget

[Naveed Yaseen]

By Jawwad Rizvi

LAHORE: Economists have questioned the ability of the government to execute projects for social sector development announced in the Federal Budget 2009-10.

Though they appreciated the announcement, they pointed out that the government does not have the capacity to implement these programmes. They also questioned from where the government will arrange financing for these projects, as it is already facing financial constraints. Dr Aisha Ghous, Head of Public Policy Private University, talking to The News said that the government had made some announcements, but under the given circumstances there was a need for much more. She stated the government will start projects in energy, social sector, low-income housing and health, but questioned how it will arrange the finances to implement them. She pointed out that the government has done nothing to provide relief to the poor in the budget, adding that no announcement was made for lower and middle income groups while the common man continued to suffer.

Allocation for the Benazir Income Support Programme (BISP) has been doubled, but it should not be included in the development budget as these are direct cash transfers to a targeted segment, she added.

Talking about the withdrawal of Petroleum Development Levy, Aisha said it was not actually waived off; rather the government had imposed Carbon Tax. This duty would be the cause of cost push inflation, which ultimately hits the lower income group that is already badly hit by inflation.

Dr Khawaja Amjad Saeed, a prominent economist also questioned the government’s abilities to implement programmes announced in the budget. He criticized the nine-point agenda of the government, saying the government never consulted the people of Pakistan while making the budget and announcing it.

Khawaja was of the opinion the government should increase salaries by 22 per cent as the inflation rate was also 22 per cent and this would provide slight relief to the salaried class. He was of the view the salaried class was the major stakeholder in the budget and this was overlooked by the government.

Criticizing the Pay & Pension Commission, he said that in the six months the commission had failed to give recommendations to the government, because of which the government did not increase salaries as per the required rates. Regarding BISP, he said that the government instead of doubling the amount should have rather spent Rs35 billion on income generating programmes than on direct transfers.

FCA Naveed Anwer Khan said the government must evolve a holistic industrial policy. The government has announced good programmes, but implementation is uncertain as it was not capable of successfully executing these programmes, he said.

He noted that the venture capital programme is a good announcement, but to implement it the government must first look at the success stories of such a programme in the world and use one story as a role model. He acknowledged that the government had also finally looked into the SME sector.

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